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Cheesecake Factory: Reports Second Quarter 2017 Results

Calabas Hills / CA. (cf) The Cheesecake Factory Inc. reported financial results for the second quarter of fiscal 2017, which ended on July 4, 2017.

Total revenues were USD 569.9 million in the second quarter of fiscal 2017 as compared to USD 558.9 million in the second quarter of fiscal 2016. Net income and diluted net income per share were USD 38.2 million and USD 0.78, respectively, in the second quarter of fiscal 2017.

The Company recorded a pre-tax, non-cash charge of USD 0.4 million during the second quarter of fiscal 2017 related to the relocation of one The Cheesecake Factory restaurant and the lease expiration of one The Cheesecake Factory restaurant. Excluding this item, net income and diluted net income per share were USD 38.4 million and USD 0.78, respectively.

Comparable restaurant sales at The Cheesecake Factory restaurants declined 0.5 percent in the second quarter of fiscal 2017, as previously announced.

«As we communicated in June, we saw volatility in week to week sales trends in the second quarter, indicative of uncertainty on the part of many consumers and unfavorable weather in the East and Midwest», said David Overton, Chairman and Chief Executive Officer. «In spite of the softer sales, our operators effectively managed the business, maintaining solid restaurant margins to protect profitability».

Overton continued, «Consistent with our objective to meaningfully increase our dividend over time, our Board approved a 21 percent increase, underscoring the stability of our cash flow generation and our confidence in the long-term prospects of the business. We are firmly committed to delivering on our mission of absolute guest satisfaction, focusing on the key tenets of the restaurant business – menu innovation, service, hospitality and operational excellence. Concurrently, we are executing on a diversified set of growth opportunities to position the Company to generate sustained shareholder returns».

Development

The Company continues to expect to open as many as eight Company-owned restaurants in fiscal 2017, including one relocation in Hackensack, New Jersey, which opened in June.

In addition, the Company now expects as many as four restaurants to open under licensing agreements internationally in fiscal 2017. This includes the first location in Hong Kong, which opened in May.

Capital Allocation

The Company’s Board of Directors declared a quarterly cash dividend of USD 0.29 per share on the Company’s common stock. The dividend is payable on August 29, 2017 to shareholders of record at the close of business on August 16, 2017.

During the second quarter of fiscal 2017, the Company repurchased approximately 0.4 million shares of its common stock at a cost of USD 21.3 million. The Company continues to expect that it will return substantially all of its free cash flow to shareholders in fiscal 2017 in the form of dividends and share repurchases.